Pamfleet deals to bring maiden fund to 70% committed

Two transactions mean the Hong Kong- and Singapore-focused private equity real estate firm is close to having committed 70 percent of the equity of its $209 million Pamfleet Real Estate Fund - but it should be able to recycle some capital from early exits.

Pamfleet Group, the Hong Kong- and Singapore-focused private equity real estate firm, is close to being 70 percent committed for its maiden real estate fund after agreeing to deals in each city.

The firm, which was formed in 2000 and originally transacted on a deal-by-deal basis, closed its Pamfleet Real Estate Fund (PREF) in February last year on $209 million.

In the last couple of weeks, the firm has agreed to the HK$958 million (€95 million; $123 million) acquisition of a 13-story industrial building in Hong Kong’s Kowloon East in a 50:50 partnership with Zug-based alternative assets investment firm Partners Group. Pamfleet also has agreed to the $45 million purchase of a 9-story retail property at the junction of Middle Road and Victoria Street in Singapore.

Although the two acquisitions bring PREF’s committed equity to approximately 70 percent, it is understood the firm has the capacity within the fund’s investment period to recycle equity from the exits of its first couple of investments. It would mean Pamfleet actually has about 50 percent of the capital, or $104.5 million, still available to it for investments during the fund’s investment period. It is understood PREF is unlikely to be fully invested until the end of the year or early next year.

Both deals reflect Pamfleet’s value-added strategy for the two Asian gateway cities. The plan for its investment in Hong Kong is to convert the site’s use to higher-yielding offices. Today, it is used only for storage purposes, but Pamfleet expects to create large floor plate offices there instead.

Partners Group’s investment was made by its Partners Group Asia-Pacific Real Estate 2011 and Partners Group Direct Real Estate 2011 funds. The latter of those two vehicles is almost fully invested, and it is expected the firm will be in the market fundraising for a successor vehicle shortly. The deal also was Partners Group’s third in Hong Kong in the past nine months

Both firms will be aiming to capitalize on high demand for office space in Hong Kong currently, particularly from the financial services and manufacturing industries. Kowloon East is an attractive alternative to Hong Kong Central, primarily as rents are lower.

Pamfleet’s investment in Singapore – a 35-year old property called Bright Chambers – is still subject to certain approvals. If successful, Pamfleet is expected to comprehensively reposition the property with a view to taking advantage of the surrounding amenities.

Pamfleet declined to comment.